In 2012, Mark Cuban received an email out of the blue with the subject line: "Want to disrupt the insurance industry?"
The sender, a 26-year-old entrepreneur named Adam Lyons, had never met Cuban, but he had a hunch the Dallas Mavericks owner might be interested in his car insurance startup, the Zebra. Described as "the Kayak for auto insurance," the Zebra helps consumers find the best car insurance rates by comparing prices from more than 200 carriers. (The name comes from the company's goal of explaining insurance "in black and white.")
Much to Lyons's surprise, Cuban replied to his email within minutes.
"I read every email I get," Cuban told Inc. in a previous interview. "I delete 99 percent of them before the end of the first paragraph, but Adam got right to the point, and I liked the concept of [the] Zebra."
Three weeks later, Cuban became one of the company's first investors. While getting the Shark Tank host interested in the business took very little time, building the Zebra into a revenue-generating company has been a long and arduous process.
A Kayak for car insurance
Lyons first had the idea for the startup in 2009 while working in the insurance industry in London, where the vast majority of car insurance transactions were made through comparison sites. Upon returning to the U.S., where auto insurance is regulated on a state-by-state basis, Lyons realized there was no comparison engine that could take into account each state's unique regulations. He reasoned that if airlines were willing to pay a commission to sites like Kayak and Expedia for referring customers, insurance companies would have the same incentives.
"That's when I really confirmed that this was going to happen in the U.S. within a few years and set out to solve that problem," he says. "From day one, we were just figuring out how to get the data. We weren't thinking about anything else."
In 2012, Lyons took his idea to Pittsburgh-based accelerator AlphaLab, where he built a prototype product for Pennsylvania residents. That year, in addition to Cuban, Lyons attracted investor Simon Nixon, founder of the financial services price comparison engine MoneySuperMarket, and Mike Maples Jr., managing partner of the Floodgate Fund. Venture capital firms Birchmere Ventures and Silverton Partners have also contributed to the Zebra's $6 million in total funding.
After spending more than a year building the product, Lyons launched the Zebra nationwide in early 2014. By the end of the year, the company had generated more than $3.4 million in revenue, a 3,300 percent increase over 2013. This year, the company is projecting $6 million in revenue.
Today, the Zebra uses its comparison platform to operate as a licensed insurance agent and has processed more than five million quotes. The company takes a commission every time an insurance policy is sold through its site.
One of the other ways the company makes money is by providing comparison data to car-buying sites like Edmunds.com.
"One of the key data points is the total cost of ownership, so how much a car is going to cost to insure relative to other cars in that Zip code," Lyons says. "That's the kind of information we can provide in real time, so that was the value add for Edmunds."
While the Zebra has only recently started to find its footing, AlphaLab director Jim Jen says he's had faith in the company since Lyons pitched him on the model in 2012.
"No one doubted that there was value in what he was doing," says Jen. In addition to the strength of the idea, he says, it was Lyons's vision and determination that persuaded the accelerator's directors to accept him to the program.
"I saw a skill and an instinct that can't really be taught," Jen says. "When you see that in action, it's pretty amazing."
In terms of future plans, the Zebra is focused on expanding into insurance for homes, boats, and RVs.
"We want folks to save by bundling, and plan to demystify every personal line of insurance," Lyons says. "We started with auto insurance because there's about $180 billion in premiums written each year, but will expand into other markets within 18 months. We want to be the one-stop shop for everything insurance."